U.S. and China Negotiate Tariff Cuts Ahead of Summit, but Disagree on Scope
nashnova research
Washington and Beijing are in early talks to cut tariffs on roughly $30 billion of non-sensitive goods each, but China wants a far wider exemption list; whether the gap closes before the November 10 truce deadline will set the next tariff trajectory.
Which goods are on the table?
The US has proposed cutting tariffs on low-end consumer goods — shoes, clothing, kitchenware — listed under Section 301's "List 4A," covering about $120 billion in consumer products.
These items currently carry the 7.5% rate locked in by the 2020 Phase One deal. This means → Washington picked the basket with the lowest rate and the least political sensitivity — testing the waters where concessions cost the least.
Treasury Secretary Scott Bessent framed the scope as "roughly $30 billion per side" of non-strategic, non-critical goods, in line with targets set by the US-China trade commission.
Why is Beijing unhappy with that scope?
People familiar with the talks say China is dissatisfied with how narrow the US list is and wants significantly broader exemptions.
In plain terms = Washington is offering to cut tariffs only on goods it considers unimportant; Beijing sees that as too small a gesture to count as a real concession.
The backdrop: the average effective US tariff on Chinese goods has reached 23.2% as of June (Wharton Budget Model estimate), and the Trump administration has since raised the expiring 10% global tariff to 12.5%, citing China's enforcement of forced-labor regulations.
Why are Washington's signals contradictory?
Even as tariff-cut talks proceed, Bloomberg reports the US is considering an additional 7.5% tariff on Chinese goods, targeting industrial overcapacity.
At the G20 finance ministers' meeting, Bessent urged other countries to reassess their trade deals with China, citing China's $1.2 trillion trade surplus in 2025 — a record.
This reflects two competing forces inside Washington: one camp wants to signal goodwill before the summit, the other wants to stockpile leverage before the next round. Fudan University's Wu Xinbo judges the leverage camp is winning.
What does this mean for what comes next?
The trade truce expires November 10. Xi Jinping is expected at the White House on September 24. Bessent, USTR Greer, and Vice Premier He Lifeng may meet in October, though a senior US official stresses nothing is confirmed.
Analyst Wang Zichen of the Center for China and Globalization notes the tariff gap between Chinese goods and those from developing Asian markets is already narrowing. This means → if the gap shrinks further, the Trump administration's strategy of reshoring manufacturing and reducing China dependence loses its tariff lever.
Put simply = the core dispute in this pre-summit round is not *whether* to cut tariffs, but *how much counts as meaningful* — until that gap closes, the broader tariff path stays unresolved.
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